Consultation published
18/07/2025
Consultation closed
26/09/2025
26/09/2025
CP25/23: Deferred Payment Credit (unregulated Buy Now Pay Later): proposed approach to regulation
We sought feedback on the rules and guidance that we propose to apply to Deferred Payment Credit (DPC) lending, often known as Buy Now Pay Later, following the Government’s decision to bring this under our regulation.
Why we consulted
DPC has been more commonly known as Buy Now Pay Later (BNPL).
DPC refers to an interest-free credit product, repayable in 12 or fewer instalments in 12 months or less and which is currently exempt from regulation. We refer to the product as DPC as this is the name given to it in the legislation that will bring it into regulation.
In addition, we already have rules for other regulated credit agreements with Buy Now Pay Later offers, for which we use the term BNPL. These are distinct from DPC.
On 14 July 2025, the Government legislated to bring DPC lending under our regulation.
From 15 July 2026, lenders who offer a DPC agreement to finance the purchase of goods or services from a merchant will come under our regulation. Merchants that offer their own DPC agreements directly will not. Nor will the broking of DPC agreements.
We consulted on the rules and guidance for the DPC sector. This included proposals for firms to give information to consumers and undertake creditworthiness assessments, and whether we should apply existing rules for regulated credit activity to this sector.
Who this is for
- DPC lenders.
- Consumer groups and organisations.
- DPC consumers.
- Merchants who offer DPC from a third-party lender as a payment option.
- Industry groups and trade bodies.
Next steps
This consultation has now closed. We will publish feedback on responses and issue a Policy Statement once we have reviewed your comments.
Background
DPC lending has grown from £0.06bn in 2017 to over £13bn in 2024.
When they work well, DPC products give consumers access to credit that is affordable, and offer a convenient way to spread payment for goods and services.
DPC is currently exempt from regulation. But there are concerns that this may result in borrowers not getting sufficient information about DPC agreements and some lending being unaffordable.
In line with our strategy (PDF), our approach seeks to help consumers navigate their financial lives while supporting sustained economic growth. Our proposals aim to ensure that DPC borrowers get the right information, in the right way and at the right time.